http://redtape.msnbc.com/2009/10/would-you-sign-up-for-a-discount-with-your-power-company-in-exchange-for-surrendering-control-of-your-thermostat-what-if-it.html
10/0/2009 by Bob Sullivan
Would you sign up for a discount with your power company in exchange for surrendering control of your thermostat? What if it means that, one day, your auto insurance company will know that you regularly arrive home on weekends at 2:15 a.m., just after the bars close?
Welcome to the complex world of the Smart Grid, which may very well pit environmental concerns against thorny privacy issues. If you think such debates are purely philosophical, you’re behind the times.
. . . Up to three-fourths of the homes in the United States are expected to be placed on the “Smart Grid” in the next decade, collecting and storing data on the habits of their residents by the petabyte. And while there’s no reason to believe . . . utilities will share the data with outside firms, some experts are already asking the question: Will saving the planet mean inviting Big Brother into the home? Or at least, as Commerce Secretary Gary Locke recently warned, will privacy concerns be the “Achilles’ heel” of the Smart Grid?
To advocates, the Smart Grid means appliances will work in electric harmony: Icemakers will operate only when the washing machine isn't, TVs will shut off when viewers leave the room, and so on. All of these gadgets will be wirelessly connected to the Internet. Households with solar panels will actually be able to sell their excess energy back to the power company. The result: lower power consumption, lower power bills, people and planet happier. . .
Dark side of a bright idea
But others see a darker side. Utility companies, by gathering hundreds of billions of data points about us, could reconstruct much of our daily lives -- when we wake up, when we go home, when we go on vacation, perhaps even when we draw a hot bath. They might sell this information to marketing companies . . . A credit bureau or insurance company could penalize you because your energy use patterns are similar to those of other troublesome consumers. Or criminals could spy the data, then plan home burglaries with fine-tuned accuracy. . ..
'Unintended consequences'
Larry Ponemon, a privacy auditor who runs The Ponemon Institute, said it's often hard to get consumers and regulators to focus on potential privacy issues ahead of time.
"Most people don't think about the issues until they become a victim of a privacy abuse," he said. "I see the privacy issues here as potentially serious. I'm not sure if I trust the utilities. It's hard to know how that information would be appended to other information and be used against consumers.”
As an example, he cited recent moves by banks to target customers who shop at stores that are frequented by consumers with low credit scores. Some are having the credit limits lowered merely because of where they shop -- a guilt-by-association model that infuriates some consumers. . .
Cost savings, efficient allocation
. . . Early on, many consumers reflexively deleted Internet cookies in part because didn’t understand what they were, and how they helped the consumer experience. They also didn’t trust Web sites after a few embarrassing news stories.
But not all Web firms suffered that fate.
"Amazon is doing well, but they are tracking the books you buy. But they are also making suggestions,” he said. “I think people feel, ‘Hey, you are doing something for me.’ And that’s ok.”
The key, he said, will be the actions of utility companies early on in the Smart Grid upgrade process. They need to “recognize that they will be having complicated conversations with customers” and work to build trust now, before the digital makeover begins in earnest. . .
Already, complaints of high bills
Discounts, like the one offered to Maryland consumers, could certainly serve as the carrot that entices U.S. power users to sign up for smart meters, and agree to allow collection of data. But some consumers already feel new meters are being used as sticks instead of carrots. . .
That's hardly the way to win over a potentially skeptical population. Still, someone will have to pay for installation of two-way electronic sensors in the system. The data mining and marketing opportunities may prove too tempting, since they could fund much of the upgrade. But doing so could create a backlash that could place the entire upgrade in peril. . .
